23 rd March 2006 2005 Preliminary Results Presentation Forward - - PowerPoint PPT Presentation

2005 Preliminary Results Presentation 23rd March 2006

Page 2 | 2005 Preliminary Results Presentation

Forward looking statements

This presentation may contain forward-looking statements and information that both represents management's current expectations or beliefs concerning future events and are subject to known and unknown risks and uncertainties. A number of factors could cause actual results, performance or events to differ materially from those expressed or implied by these forward-looking statements.

Page 3 | 2005 Preliminary Results Presentation

Preliminary results presentation

Strategy & Outlook Simon Lockett Projects Update Robin Allan Financial Highlights Tony Durrant

Page 4 | 2005 Preliminary Results Presentation

Strategy & outlook

Page 5 | 2005 Preliminary Results Presentation

Premier’s business strategy

• Targeting 50,000

boepd in medium term

• Reorganised

business

• Build on quality

prospect inventory for 2007 and beyond

• Minimum of 4 high

impact wells per annum within disciplined spend Strategy

• Acquisitions focus
• n core areas
• Exciting 2006

exploration programme, already delivering results

• Portfolio of new and

incremental development projects

• Rising production in

2006 Progress

Page 6 | 2005 Preliminary Results Presentation

Asia – building on our Natuna Sea position

2000 4000 8000

Asia Production (boepd)

6000 10000 12000 18000 2006 2007 2008 2009 14000 16000

Potential new projects Booked reserves

• Use technical and commercial expertise from operations in the Natuna Sea to deliver new

exploration opportunities and production projects across the region. 2005 2006

• Vietnam prospect delivery
• Lembu-Peteng and Macan Tutul
• Indonesia HSE performance
• Vietnam high-impact wells
• West Lobe project progress
• Singapore gas sales progressing
• Ratna

Page 7 | 2005 Preliminary Results Presentation

West Africa – building a new core business

• Develop a pipeline of high impact drillable prospects and capitalise on Mauritania position

2005 2006

• Congo and SADR acreage acquisitions
• Guinea Bissau drilling
• Chinguetti development complete
• Chinguetti Phase 2
• Tiof, Tevet and Banda appraised
• Tiof development decision
• Progress Government of Mauritania issues

2000 3000 5000

West Africa Production (boepd)

Potential new projects Booked reserves 4000 7000 2006 2007 2008 2009 6000 1000

Page 8 | 2005 Preliminary Results Presentation

North Sea – returning to growth

2000 4000 8000

North Sea Production (boepd)

6000 16000 2006 2007 2008 2009 14000 10000 12000 Potential new projects Booked reserves

• Build on Norway position by seeking out high impact exploration opportunities and

maximise the value from existing UK producing assets 2005 2006

• Norway acreage additions
• UK exploration - Peveril
• Kyle offtake reconfiguration
• Frøy development progress
• Wytch Farm infill drilling
• Wytch Farm EOR

Page 9 | 2005 Preliminary Results Presentation

Middle East & Pakistan – enhancing the Pakistan gas business

2000 4000 8000

Pakistan Production (boepd)

6000 10000 12000 18000 2006 2007 2008 2009

Potential new projects Booked reserves

14000 16000

• Capitalise on a leading position in Pakistan’s rapidly growing gas market, and build a

position in Egypt & the Middle East 2005 2006

• Al Amir discovery
• Al Amir appraisal
• Zamzama 2 sanction
• Indus E exploration (Anne)
• Bhit/Qadirpur additional sales progress
• Bhit/Qadirpur plant upgrades

Page 10 | 2005 Preliminary Results Presentation

5 Year production potential

Production Profile by Region (boepd)

2006 60000 70000 2007 2008 2009 2010 50000 40000 30000 20000 10000 South Asia M/East & Pakistan West Africa North Sea

Production Profile (boepd)

2006 60000 70000 2007 2008 2009 2010 50000 40000 30000 20000 10000

(NB: Only includes discovered hydrocarbons (no exploration success assumed or acquisitions))

Potential new projects Booked reserves

Page 11 | 2005 Preliminary Results Presentation

Operational highlights

• Production ahead of

budget at 33,300 boepd

• Developments on track

in 2006

• Further gas sales

progressed

• Resource base

increased to 232 mmboe

• Successful exploration

and appraisal year

• World class HSE

performance Strong gas demand in Pakistan, Indonesia offsets UK

• decline. Rising profile in 2006.

West Natuna (West Lobe) expected 3Q 2006 Chinguetti onstream in February 2006. Zamzama phase 2 signed. Good progress in Pakistan and West Natuna. Net additions from discoveries and new licence awards. New acreage added for future exploration. 5 successes from 10 wells in 2005. Excellent start to 2006 in 2 operated wells. 5 years of continuous improvement as an Operator

Page 12 | 2005 Preliminary Results Presentation

Projects update

Page 13 | 2005 Preliminary Results Presentation

Asia – building on our Natuna Sea position

• Indonesia drilling update
• Singapore gas sales & associated

development

• Vietnam high-impact wells
• Ratna progress

2000 4000 8000

Asia Production (boepd)

6000 18000 2006 2007 2008 2009 14000 10000 12000 Potential new projects Booked reserves 16000

Page 14 | 2005 Preliminary Results Presentation

Indonesia drilling update

Page 15 | 2005 Preliminary Results Presentation

Macan Tutul-1

Indonesia drilling update

Natuna Sea Block A PSC 2006 success in

• Macan Tutul-1
• Lembu Peteng-1

Page 16 | 2005 Preliminary Results Presentation

Lembu Peteng-1

Indonesia drilling update

Page 17 | 2005 Preliminary Results Presentation

Lembu Peteng-1

Ibu Lembu-1

Indonesia drilling update

Page 18 | 2005 Preliminary Results Presentation

Singapore gas sales & associated development

Page 19 | 2005 Preliminary Results Presentation

Singapore gas sales & associated development

Gas Sales

• Excellent demand in 2005
• Progressing GSA2 negotiations

Anoa West Lobe

• On schedule and on budget
• First gas in Q3 2006

Page 20 | 2005 Preliminary Results Presentation

Vietnam high-impact wells

Page 21 | 2005 Preliminary Results Presentation

Blocks 12E & W Operator – Premier

• Dua
• Blackbird
• Swan
• Falcon, Peacock and Quit:

follow-on prospects

Dua Structure

Proposed 12E-CS-1X

Blackbird Structure

Quit Peacock Falcon Swan Dua Blackbird

Vietnam high-impact wells

Page 22 | 2005 Preliminary Results Presentation Existing Well 12E-LX-1X

• ff-structure

Premier 12E-CS-1X Planned at crest 12E-LX-1X Thick sands with residual oil; drilled close to mapped contact Oil Water Contact

Blackbird Prospect

Vietnam high-impact wells

Page 23 | 2005 Preliminary Results Presentation

Dua-1X

12-A-1X Dua-1X Discovery Dua-2X Premier Dua-4X Dua-1X (1974) Flowed 1500 bopd from (damaged) Lower Miocene ‘Dua’ Sands

5km

Confirming Dua oil

Vietnam high-impact wells

Page 24 | 2005 Preliminary Results Presentation

Ratna progress

Page 25 | 2005 Preliminary Results Presentation

Ratna progress

Page 26 | 2005 Preliminary Results Presentation

West Africa

Page 27 | 2005 Preliminary Results Presentation

West Africa – building a new core business

2000 3000 5000

West Africa Production (boepd)

Potential new projects Booked reserves 4000 7000 2006 2007 2008 2009 6000 1000

• Congo high impact exploration
• S.A.D.R. high impact exploration
• Guinea Bissau high-impact wells
• Mauritania – Chinguetti onstream,

next steps

Page 28 | 2005 Preliminary Results Presentation

Congo high impact exploration

Page 29 | 2005 Preliminary Results Presentation

Block Marine IX Highly prospective block, with significant reserve potential. Premier 58.5% – Operator

Frida Prospect Frida Prospect

Kitina 150 m bbls Moho 110 m bbls N’Kossa 280 m bbls

Congo high impact exploration

Page 30 | 2005 Preliminary Results Presentation

Top Lower Albian depth map with Miocene channel depth overlay

Tertiary Channel 2.0 1.0 3.0 4.0

Frida Prospect

Congo high impact exploration

Page 31 | 2005 Preliminary Results Presentation

S.A.D.R. high impact exploration

Page 32 | 2005 Preliminary Results Presentation

S.A.D.R. high impact exploration

Page 33 | 2005 Preliminary Results Presentation

Guinea Bissau high-impact wells

Page 34 | 2005 Preliminary Results Presentation

Total mean un-risked reserves in the top prospects is >1.5 billion barrels (gross) A $50/bbl oil price economics generates $7 NPV/bbl

135 mbbls 100 mbbls 180 mbbls 80 mbbls 151 mbbls Espinafre 70 mbbls

Sinapa-1

Sinapa-2,2z

175 mbbls 30 mbbls 230 mbbls 110 mmbbls Eirozes 250m bbls 300 mmbbls 190 mbbls

Guinea Bissau high-impact wells

Page 35 | 2005 Preliminary Results Presentation North

Eirozes-1 Proposed Well (WD= 120 metres)

Eirozes Prospect: mean reserves 250 MM bbls

Top Albian Sand Salt South

Guinea Bissau high-impact wells

Page 36 | 2005 Preliminary Results Presentation

Espinafre Prospect: mean reserves 70 MM bbls

North Top Albian Sand Salt South

Espinafre-1 Proposed Well (WD= 34 metres)

Guinea Bissau high-impact wells

Page 37 | 2005 Preliminary Results Presentation

Mauritania – Chinguetti onstream, next steps

Page 38 | 2005 Preliminary Results Presentation

Mauritania – Chinguetti onstream, next steps

Page 39 | 2005 Preliminary Results Presentation

Mauritania – Chinguetti onstream, next steps

Jalakk Tiof SW N’Dor Bogue S Fantar SW Kibaro Awatt Colin

Equivalent North Sea block

Tevet-2 / Tevet Deep 2005 Cretaceous discovery Labeidna 2005 Miocene discovery

Page 40 | 2005 Preliminary Results Presentation

North Sea – returning to growth

Page 41 | 2005 Preliminary Results Presentation

North Sea – returning to growth

2000 4000 8000

North Sea Production (boepd)

6000 16000 2006 2007 2008 2009 14000 10000 12000 Potential new projects Booked reserves

• Norway acreage additions
• Frøy development progress
• UK progress – Wytch Farm & Kyle

Page 42 | 2005 Preliminary Results Presentation

Norway acreage additions

Reprocessing 3D 34/2, 34/5 – 15% Reprocess 3D 34/4 (N) – 30% Reprocess 3D 35/12, 36/10 – 40% Reprocess 3D 16/1 (E), 16/4- 30% 100 sq.km 3D aq Frøy Area – 50%

2005 APA Round: Awarded 5 E&P Work programme commitment level low, ALL work programmes targeting 2007 drilling.

Page 43 | 2005 Preliminary Results Presentation

Frøy development progress

• STOIIP 239 MMstb
• Historical Production

38 MMstb

• Future resources

20-40 m bbls

• Target development

approval – early 2007

• Planned first oil

mid-2009

Frøy Field

Page 44 | 2005 Preliminary Results Presentation

Kyle

• Offtake reconfigured to a single FPSO
• Targeting un-tapped Palaeocene reserves

UK progress – Wytch Farm & Kyle

Wytch Farm

• Infill drilling continues
• Key projects are:

– Low-salinity water injection EOR – 98/7 development

Page 45 | 2005 Preliminary Results Presentation

Middle East & Pakistan

• Bhit & Zamzama progress
• Qadirpur & Kadanwari progress
• Egypt - Al Amir appraisal
• Pakistan – Anne high impact

exploration

2000 4000 8000

Production (boepd)

6000 18000 2006 2007 2008 2009 14000 10000 12000 Potential new projects Booked reserves 16000

Page 46 | 2005 Preliminary Results Presentation

Pakistan – Bhit & Zamzama progress

Page 47 | 2005 Preliminary Results Presentation

Zamzama

• Phase 2 approved in 2005 – work in progress

Bhit - Badhra

• GSA to increase rates close to completion
• Seismic recently acquired to evaluate Badhra upside

Pakistan – Bhit & Zamzama progress

Page 48 | 2005 Preliminary Results Presentation

Kadanwari

• High gas prices and strong offtake
• 2006 drilling to exploit reservoir upside

and utilise plant capacity Qadirpur

• Further plant expansion to proceed
• GSA to increase rates being negotiated
• Possible power plant to sell further gas
• Deeper reservoir to be drilled

Pakistan – Qadirpur & Kadanwari progress

Page 49 | 2005 Preliminary Results Presentation

Egypt - Al Amir appraisal

Page 50 | 2005 Preliminary Results Presentation

South Gharib Fm

Al Amir-2

Egypt - Al Amir appraisal

Zone-1 top oil Zone-2 Zone-3 Zone-4

Page 51 | 2005 Preliminary Results Presentation

Pakistan – Anne high impact exploration

Page 52 | 2005 Preliminary Results Presentation

Pakistan – Anne high impact exploration

The Anne well is being drilled down-flank to target best channel package and to confirm an economic

• il volume.

(i.e. attic likely to be sub-commercial)

Anne-1 E W

Page 53 | 2005 Preliminary Results Presentation

Exploration – 2006 exploration well plans

Guinea Bissau: Eirozes-1 Espinafre-1 Mauritania : Dore-1 (dry) : Colin-1 : Kibaro-1 Gabon : Themis-1 Egypt : Al Amir-2 Appraisal Pakistan : Anne-1 Indonesia : Tupai-1 : Ganesha-1 : Macan Tutul (gas discovery) : Lembu Peteng-1 : Lukah-1 Vietnam : Blackbird-1 : Dua India : Masimpur-3 UK : Peveril

West Africa

2006 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Asia North Sea M/East & Pakistan

Appraisal wells Exploration wells Rigs contracted for all wells except marked High impact wells

Page 54 | 2005 Preliminary Results Presentation

2005 Financial Highlights

Page 55 | 2005 Preliminary Results Presentation

Financial highlights

• Operating profit up

112%

• Profit after tax up 75%
• Healthy cashflow
• Strong balance sheet
• Share buy back

initiated $125.7m (2004: $59.3m) $38.6m (2004: $22.1m) $118.9m (2004: $109.6m) Net debt $26.2m £10 million programme Rising oil and gas prices, stable production Rising profits offset by higher taxation charge Cashflow covers all operating and capital expenditures at current prices Significant cash inflow in January 2006 Average purchase cost of £5.55 per share

Page 56 | 2005 Preliminary Results Presentation

Income Statement

Working Interest Production (mboepd) Entitlement Interest Production (mboepd) Realised oil price ($/bbl) Realised gas price ($/mcf) Sales and other operating revenues Cost of sales Exploration expense Pre licence exploration costs General and administration costs Operating profit Interest income and exchange gains Interest and other finance expense Profit before taxation Taxation Profit after tax Earnings per share - basic (cents) Earnings per share - diluted (cents)

Prepared in accordance with IFRS

Year to 31 Dec 2005 Year to 31 Dec 2004 33.3 28.7 48.38 3.82 $m 359 (176) (21) (17) (20) 126 6 (7) 125 (86) 39 47.0 46.6 34.7 31.5 29.92 3.24 $m 252 (135) (28) (13) (17) 59 2 (8) 54 (32) 22 26.8 26.1 Highlights Underlying operating costs steady at <US$6 per barrel Reduced dry hole costs Low interest charges with strong balance sheet Full year of profit oil and gas in Indonesia Full utilisation of past losses in Pakistan Based on 82.1million shares Includes one-off costs of US$3 million Rising gas prices (especially in Singapore) Full benefit of current high prices in 2006 Targeting 10% increase by year-end 2006

Page 57 | 2005 Preliminary Results Presentation

Cashflow

Net cash flow from operations Net interest Taxation Operating cash flow Capital expenditure Pre licence exploration costs Net share issues/(purchases) Other movements Movement in net cash Opening net cash/(debt) Closing net cash/(debt)

Prepared in accordance with IFRS

Year to 31 Dec 2004 $m Year to 31 Dec 2005 $m

207 (2) (86) 119 (133) (17) (20) 6 (45) 19 (26) 165

• (55)

110 (92) (12) 2 (2) 6 13 19

Exploration spend covered 2.3 X Buy back of ordinary shares (£10 million) and purchase of shares for ESOP trust 2005 2004 Development 133 92 Exploration 51 46 82 34 Acquisitions 13

Page 58 | 2005 Preliminary Results Presentation

Gas pricing – improving economics

Brent & HSFO Prices (Index)

90 210 190 170 150 130 110 2004 2005 ‘06

PKP Gas Prices ($/mmbtu)

15 7 25 40 60 5 4 3 2 1 6 55 10 20 30 35 45 50

Kadanwari Bhit Qadirpur Zamzama PKP Brent HSFO

2005: US$7.90 per mscf (2004: US$4.96 per mscf) 2005: US$2.20 per mscf (2004: US$2.13 per mscf)

Page 59 | 2005 Preliminary Results Presentation

10% Increase in Total Resources

100 140

Reserves/Resources (mmboe)

Opening reserves/ resources Production Net Revisions Resource additions Closing reserves/ resources

80

Unbooked resources movement Booked reserves movement Unbooked resources Booked reserves

120 180 160 200

• Booked reserves independently reviewed
• Resource additions include Dua & Froy.
• No resources yet booked for Banda or Swan discoveries

Divestment

220 240 60 40 20 210 232

Page 60 | 2005 Preliminary Results Presentation

Future Field Capex by Region ($ million)

140 180 100 80 60 40 20

West Africa South Asia

• M. East & Pakistan

North Sea

120 160

Future Field Capex ($ million)

2006 140 180 2007 2008 2009 100 80 60 40 20 120 160

Potential new projects Booked reserves

Potential future field Capex

2006 2007 2008 2009

Page 61 | 2005 Preliminary Results Presentation

Exploration spend

• Targeted at around $50m per annum
• Pre-licence exploration costs estimated at additional $10m per annum
• Will require active portfolio management in current environment to meet target

– Attractive farm-in offers under consideration

10 20 40

Exploration Spend ($M)

30 60 2003 2004 2005 2006 E 50

Page 62 | 2005 Preliminary Results Presentation

Financial outlook

• Balance sheet effectively ungeared
• Strong and stable cashflows will fund planned capital programme at $50/bbl

– including annual exploration spend at $50m

• Hedging programme through 2010 with floors around $40/bbl protects downside
• Corporate credit facility of $275m largely undrawn
• Financially strong to fund new development projects and acquisitions

Page 63 | 2005 Preliminary Results Presentation

Summary

• Exciting year ahead
• Close out gas sales contracts in Indonesia/Pakistan
• Actively target acquisitions in core areas
• High impact exploration in Guinea Bissau & Vietnam

Page 64 | 2005 Preliminary Results Presentation www.premier-oil.com

March 2006